April, 2024

Issue #6

Edito
Banks’ announcements can sometimes defy expectations. Even though they often come up
with copy-cat commitments, from time to time financial institutions may try to outplay theirpeers. Royal Bank of Canada (RBC) appears to have done just that. Against a backdrop ofanti-climate justice politics, RBC has become the first top North American bank to adopt afinancial target dedicated to low-carbon energy. This comes at a time when its counterpart,the Bank of Montreal, has chosen to downgrade the coal policy for its US subsidiary toavoid a boycott in West Virginia, USA. Moreover, RBC’s new targets don’t include CO₂
capture and storage technologies - which is pretty good news. Less positively, the bank has
yet to address the flip side of the coin: ending its support to fossil fuel expansion.
Nor has this issue been adequately addressed on the other side of the Atlantic, including inFrance, which likes to claim to be ahead of the game on energy and climate issues. French
investors are more advanced than their peers in other parts of the world: 20 financial
players with close to two trillion dollars under management, have adopted restrictions on
their finance for companies developing oil and gas. However, there is scope to still step up
their ambitions, especially among the investment branches of large French banking groups
including BNP Paribas, Crédit Agricole and Natixis. But there should by now be aconsensus among the financial institutions which, some years ago, helped pave the way forcoal-free finance, that action is also needed to address oil and gas expansion.
Again in Europe, another in-depth look into financial data shows that liquified natural gas(LNG) terminals in Europe are backed by private equity firms. While some traditional
European institutions have started to turn away from LNG export financing, this has been
cautiously, and without taking measures to restrict finance for regasification. Major private
equity firms are in fact even worse than traditional financial institutions as none haveintroduced science-based policies excluding these projects, which lock Europe into a highcarbon future. In other words, the climate movement now has a double fight to win on LNG,against traditional institutions and against private equity.

Noam-Pierre Werlé, Policy Analyst at Reclaim FinanceNew policies & updates13191

8+0 updates:+0 updates:+2 updates:

coalpolicies

oil & gas
policies

sustainable powercommitments

Royal Bank ofCanada
SociétéGénérale

Focus on the policies of French investors
French investors are at a crossroads. Asset managers and asset owners can either choose
to call, once and for all, for the end of support to oil and gas expansion, or to maintain astatus quo at the risk of damaging their status as pioneers in climate finance.
Where is Paris standing in terms of climate commitments?
There are a number of financial institutions in France that are at the forefront of responsible
investment practices, with some even starting to take action against companies expanding
oil and gas. Of the 27 asset managers analyzed in this article, 9 have restricted theirinvestments in hydrocarbon expansion. This share is even higher for asset owners, with 11
institutions out of 20 immediately addressing investments in companies expanding oil andgas activities. But a lot remains to be done, even in France, where financial institutions
paved the way to phase out coal at the end of the 2010s, driven by political pressure.
In November 2023, the French government announced a remodeling of the state-ownedlabel for socially responsible investment (SRI), with a batch of new criteria for asset
managers to comply with. One of these outlaws the presence of companies expanding
fossil fuels in funds from the SRI label. It is yet more proof that this should be a red line forall sector policies to guarantee conformity with climate science. This exclusion rule should
apply to all ESG funds claiming to be sustainable or socially responsible.
What is left to be done for these investors?
Even though a certain number of investors have introduced restrictions for companies
responsible for upstream expansion (i.e. the development of new oil and gas explorationand production projects), only a handful have extended this commitment to midstream oiland gas, which would include companies developing new LNG terminals. Only two asset
managers (Mirova, Tikehau Capital) and three asset owners (Ircantec, MACSF, Suravenir)
have made such a commitment which, because it is essential to deliver on the objective oflimiting global temperature rise to 1.5°C, should already be widespread among French
investors.
Those with the lowest level of ambition must now take action against oil and gas expansion,and this can be achieved through exclusion but also engagement. Asset managers shouldtake advantage of their voting rights to sanction companies at their AGMs by voting against
Say on Climate (see Woodside as an example) and routine resolutions if they continue todevelop oil and gas projects. Similarly, asset owners must influence the practices of theasset managers they collaborate with by requiring that they commit to more climatecompliant investment criteria.

Find out more on asset owners

Find out more on asset managers

Latest news
Investors and banks should give up
on TotalEnergies’ bonds
With bonds accounting for close to 68% of
TotalEnergies’ financing from 2016 - 2022, theFrench oil & gas major relies heavily on thewillingness of investors to buy these securities andof banks to underwrite them. All of the financial
institutions supporting TotalEnergies have yet tointroduce restrictions on their investment andunderwriting to companies expanding oil and gas.
Read more

Thoughts on the AGM season tocome
Reclaim Finance shines a light on Engie andArcelorMittal and calls on their shareholders tosanction them for their lack of adequate transition
plans. Engie’s strategy, which still relies on gas
expansion, and ArcelorMittal’s coal-based steelbusiness are not compatible with climate science,and investors must use their voting rights to say it
out loud. Read more here and here.

Resources

Discover

DiscoverDiscoverTake action!
Find out more about our recommendations for financial institutions to adopt robust fossil fuelpolicies.

Reclaim FinanceCet email a été envoyé à {{contact.EMAIL}}.
Vous avez reçu cet email parce que vous vous êtes inscrit à notre newsletter.
You can contact us at research@reclaimfinance.org
Se désinscrire